Five Chinese stocks to watch amid regulatory crackdown

Highlights

  • The Alibaba Group’s (NYSE: BABA) revenue rose 34% YoY to US$31.86 billion in the quarter ended June 30, 2021.
  • NIO Inc’s (NYSE: NIO) total revenue surged 127.2% YoY to US$1.30 billion in Q2 of FY 2021.
  • The total revenue of Baidu, Inc. (NASDAQ: BIDU) rose 20% YoY to RMB31.35 billion in Q2 of FY 2021.

Chinese stocks have been on investors' radar following Beijing's regulatory crackdown. The government's crackdown on companies like DiDi Global Inc and Ant Group has hit the global headlines recently. Some investors were wary of investing in Chinese stocks after these developments, although the overall sentiments for the companies remained positive.

Here we look at some of the top Chinese stocks drawing investors’ attention.

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Alibaba Group Holding Limited (NYSE: BABA)

Alibaba Group Holding Limited is an Hangzhou-based technology company that runs a popular e-commerce platform. It is one of the biggest US-listed Chinese companies.

The shares of the company traded at US$175.32 at 12:11 pm ET on September 7, up 2.95 percent from its closing price of September 3. Its stock value decreased by 25.26 percent YTD.

The company reported a revenue of US$31.86 billion in the June quarter of 2021, up 34 percent from the year-ago quarter. Its income from operations decreased by 11 percent YoY to US$4.77 billion. Its non-GAAP adjusted EBITDA was US$7.53 billion, down 5 percent YoY from the same quarter of the previous year.

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The company reported a net income of US$6.63 billion or US$0.32 per diluted share. Its net cash generated through the operating activities was US$5.20 billion in the quarter ended June 30, 2021. On a non-GAAP basis, its free cash flow came in at US$3.20 billion.

The firm has a market cap of US$474.32 billion, a P/E Ratio of 21.34, and a forward P/E one year of 20.52. Its EPS is US$8.20. The highest and lowest stock prices for the last 52 weeks were US$319.32 and US$152.80, respectively. Its share volume was 16,440,500 on September 3.

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NIO Inc. (NYSE: NIO)

Nio Inc. is based in Shanghai and manufactures electric vehicles. The stock of the company was priced at US$41.03 at 12:42 pm ET on September 7, up 1.63 percent from its previous closing price. The NIO stock plunged 24.53 percent YTD. The market cap of the company is US$67.14 billion, and the forward P/E one-year is -51.10. Its EPS is US$-0.85.

The highest and lowest stock price of the firm for the last 52 weeks were US$66.99 and US$15.61, respectively. Its share volume on September 3 was 30,385,250.

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The total revenue of the company increased by 127.2 percent YoY to US$1.30 billion in Q2 of fiscal 2021. Its gross profit jumped 402.7 percent YoY to US$243.8 million, while its gross margin came in at 18.6 percent, compared to 8.4 percent in the year-ago quarter.

The loss from operations declined by 34.2 percent YoY to US$118.2 million. Its net loss was US$90.9 million, a decrease of 50.1 percent from the Q2 of fiscal 2020. The company has delivered a total of 21,896 vehicles in Q2 of fiscal 2021.

In August 2021, the company has delivered 5,880 vehicles, representing an increase of 48.3 percent YoY. It now expects to deliver around 22,500 to 23,500 vehicles in Q3 of FY 2021.

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DiDi Global Inc. (NYSE: DIDI)

DiDi Global Inc. is a ride-hailing company headquartered in Beijing. It made its US stock market debut in June. The shares of the company traded at US$9.43 at 1:01 pm ET on September 7, up 4.55 percent from its closing price of September 3.

The firm has a market cap of US$45.33 billion. Its stock value fell 36.21 percent YTD.

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The highest and lowest stock prices for the last 52 weeks were US$18.01 and US$7.16, respectively. Its share volume was 44,892,390 on September 3.

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JD.com, Inc. (NASDAQ: JD)

JD.com Inc. is a leading Chinese e-commerce company based in Beijing. It provides business-to-consumer services through its platform.

The stock of the company was priced at US$83.06 at 1:16 pm ET on September 7, up 4.01 percent from its previous closing price. The JD stock plummeted 7.5 percent YTD.

The market cap of the company is US$128.82 billion, the P/E Ratio is 24.13, and the forward P/E one year is 103.71. Its EPS is US$3.44.

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The highest and lowest stock price of the firm for the last 52 weeks were US$108.29 and US$61.65, respectively. Its share volume on September 3 was 8,507,041.

The net revenue of the company surged 26.2 percent YoY to RMB253.8 billion in Q2 of fiscal 2021. Its net service revenue was RMB34.1 billion, an increase of 49.2 percent from the year-ago quarter. The income from operations was RMB300.8 million, compared to RMB5.0 billion in Q2 of fiscal 2020. It reported a net income attributable to ordinary shareholders of RMB794.3 million, compared to RMB16.4 billion in the prior year's quarter. Its diluted net income per ADS came in at RMB0.50.

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Baidu, Inc. (NASDAQ: BIDU)

Baidu, Inc. is a technology company headquartered in Beijing. It provides various online technology services and AI solutions. Its shares traded at US$167.47 at 1:36 pm ET on September 7, up 2.75 percent from its closing price of September 3. Its stock value tumbled 24.82 percent YTD. The firm has a market cap of US$58.09 billion, a P/E Ratio of 8.71, and a forward P/E one year of 27.58. Its EPS is US$19.17.

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The highest and lowest stock prices of the company for the last 52 weeks were US$354.82 and US$116.41, respectively. Its share volume was 3,778,080 on September 3.

The total revenue of the company increased by 20 percent YoY to RMB31.35 billion in Q2 of fiscal 2021, compared to RMB26.03 billion in the year-ago quarter. Its operating income came in at RMB3.46 billion, representing a decrease of 5 percent from Q2 of fiscal 2020.

The company reported a net loss of RMB583 million, compared to a net income of RMB3.57 billion in the same quarter of the previous year. Its diluted earnings per ADS came in at a loss of RMB1.70, compared to diluted earnings per ADS of 10.31 in Q2, FY20. The company expects its Q3 revenue for fiscal 2021 to be between RMB30.6 billion and RMB33.5 billion.

Source: pixabay

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Bottomline

A total of 248 Chinese companies were listed on Nasdaq, NYSE, and AMEX as of May 5, 2021, with a combined market value of around US$2.1 trillion. Besides the government actions on companies, investors were also wary of the worsening US-China trade relations. However, analysts expect more investors to return to Chinese stocks after the regulatory threat wanes.

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